Dollar rises as economic data above forecasts bolsters Fed view

The dollar rose against the euro for a fifth day after the U.S. reported stronger-than-forecast economic data, spurring speculation the Federal Reserve will reduce bond purchases.

The greenback erased an earlier loss as U.S. factory orders rose more than forecast in May and consumer confidence for June exceeded projections. The 17-nation currency weakened as European Central Bank President Mario Draghi said the euro-area economy’s condition still requires a stimulative monetary policy. Sweden’s krona rose from the weakest since November against the dollar as producer prices fell less in May than economists forecast.

“Some good economic news helped the dollar versus the G-7,” Mike Moran, a senior currency strategist at Standard Chartered Plc in New York, said in a telephone interview. “It really helped take some anxiety away from the tapering debate, which has really been the dominant theme. It reminded investors of the underlying U.S. economy, where we’ve seen pockets of growth relative to other global economies.”

The U.S. currency appreciated 0.2% to $1.3091 per euro at 3:41 p.m. in New York, after earlier declining as much as 0.2%. The greenback increased 0.1% to 97.82 yen after falling 0.8%. The euro slipped 0.1% to 128.07 yen.

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The yen has gained 2.7% to the greenback this month, while Norway’s krone has declined 3.7%. This quarter, the euro has led all major gainers with a 2.1% increase, while the worst-performing Australian dollar has slipped 11%. The greenback is the best-performing currency in 2013 and South Africa’s rand has plunged 16%.

The Swedish krona rose for the first time in five days as Statistics Sweden said producer prices fell 0.1% in May from April, when they dropped 1.1%. Economists surveyed by Bloomberg predicted a decline of 0.2%.

The krona climbed 0.8% to 6.7118 per dollar after sliding yesterday to the weakest since Nov. 16.

The Malaysian ringgit strengthened versus all 31 of its most-traded counterparts, rebounding from a three-year low, as some investors judged this month’s losses excessive. The currency appreciated 1.2% to 3.1825 per dollar, the biggest gain in more than seven weeks.